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Ep06: Farouk Meralli CEO of mClinica

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Transcript

00:03 Tony Estrella 

Welcome to Digital Health Today, Asia Pacific Edition. Your go-to podcast to learn about the transformation of healthcare in a region with over 4.5 billion people across more than 40 countries. I’m your host, Tony Estrella. Today, I’d like to introduce Farouk Meralli, CEO of mClinica. He has a personal passion for public health, especially improving health care in lower to middle income markets. mClinica’s flagship product SwipeRx is transforming pharmacy, an important channel to reach patients. Their data shows independent pharmacists interact with patients 12 times per year, and mClinica is seeking to improve the quality of these health interactions for over 100 million individuals. So let’s get started.

Farouk, thank you for joining us today. Wonderful to have you on our podcast.

00:50 Farouk Meralli 

Great to be here, Tony, a big fan of the show.

00:52 Tony Estrella 

Great, great. So for our audience, why don’t you tell us a little bit more about yourself? Why did you get into healthcare in the first place?

00:59 Farouk Meralli 

Yes. So happy to give you a bit of background. So I’m actually from Canada, I went to school in the US. My background is in public health. And after that, I worked for very large pharmaceutical company. So I work for Pfizer, Johnson & Johnson, Sanofi and Roche, across New York, Boston, San Francisco, always covering really emerging markets. And in parallel with that, I did a lot of advisory work for players like the WHO and the CDC. So I was always seeing healthcare across both the private and public sector. And one of the persistent themes I saw across all of this work, were that pharmacies in many lower to middle income countries or emerging markets, if you will, were actually very hard to access. And the reason why where pharmacies were largely these independent mom-and-pop shops, very fragmented, running largely on pen and paper with no technology or systems. And Southeast Asia was very much characteristic of this. And so I had this idea for mClinica, to really go out and connect all these pharmacies together on a common platform, and effectively provide them the same value that large pharmacy chains have to the little guy. And I think in doing so, by connecting all these pharmacies together, it provides consolidated access to pharma companies, governments and NGOs, who are looking to reach pharmacies, patients buying from these pharmacies and meaningful global health data. So that’s really how the whole story began.

02:28 Tony Estrella 

Hmm, interesting. So I think what, if anyone who works in pharma, I actually worked at Pfizer myself, you realize that the influence of pharmacy is very impactful for individuals. And, you know, we’ll get into more of that, and what you’re seeing specifically in the various countries you operate in. When you started in Asia Pacific, you said you worked in the US, how did you decide where to call home? And where to identify as your first target market when you decided to settle here?

02:55 Farouk Meralli 

Yeah, so it’s a bit of a funny story. So you know, I was living in San Francisco. And as you know, pharma execs, you have a pretty good life, right? It’s a pretty stable life, you know, what your life is gonna look like. It’s very comfortable. But I kind of had the kind of entrepreneurial bug, I suppose I had done a startup earlier before, which was quite exciting, and interesting. And so I had this idea for mClinica, and I pitched it to the Global Head of Emerging Markets at a pharma company. And they said, “Look, you know, we love what you’re doing and thinking, we’ll be your first client do it in the Philippines”. So actually, that’s how it started. What mClinica was was a broad-based emerging market solution. And it could have worked really anywhere. But I think when life gives you an opportunity like that, you take it. And so because of that, the Philippines was the pilot. I actually left, San Francisco, got on a plane to the Philippines, no team, no tech, had 60 days to get the first pharmacy in to make the first milestone payment. And that’s how it started, you know, luckily found a great team built the tech, and then started scaling across Southeast Asia. And so that’s a little bit of the story. So I suppose they could have said, hey, go do it in Kazakhstan. And maybe I’d be there, right now.

04:09 Tony Estrella 

So, that’s it’s interesting. So, you know, you really just got pushed into, I guess, your first market. And kudos to you for taking the leap of an entrepreneur for just figuring things out on the fly when you were presented a challenge. And it seems like it’s grown from there. So you could have started in many different directions and building new type of pharmacy. Why don’t you take a step back, and you mentioned broadly, you know, why pharmacy is a challenge, but what specifically what will you be trying to identify as the core problem for what mClinica should do? Can you walk us through your thought process there?

 04:44 Farouk Meralli

Yeah. So I think what’s really interesting is that on average across Southeast Asia, you know, patients will actually visit a pharmacy almost 12 times a year, but when they visit a physician, it’s almost 1.2 times a year, right. So when you look at this, this becomes an incredible touch point in terms of patient population. And I think what’s also interesting is the role of pharmacists actually accentuated here in Southeast Asia, largely because access to physicians is low, time with physicians is low. And therefore, the pharmacist is seen sort of as a practitioner almost of health care in their communities, they spend time to advise the patient, they spend time to actually counsel and almost manage adherence of patients where it is necessary. And so they take this really kind of pivotal role, whether they’re an influencer or a decision maker for the patient. And I think, you know, when it comes to that, and that ability to improve public health, then you have to look at the pharmacy itself and say, how much really has innovation been driven towards this particular stakeholder group within Southeast Asia? We felt it was very underserved. And if it’s underserved inherently, it may be inefficient. And that’s certainly what we went through. What we found out was that pharmacies not only were equipped with the knowledge, education and skills to help patients, but they also had very discrete problems in the supply chain, whether that is accessing available and affordable medicines through a very fragmented upstream supply chain of 1000s of wholesalers and distributors, and even being able to solve problems of affordability and access for the end patient when they’re dealing with situations of high cost medication and low health literacy. So when you look at this, and you say, well, the pharmacy is the center of getting access to product and providing access to the patient, the question then becomes how do you help these pharmacies access affordable and available product, use their scale, use technology to drive down the price of medicine that they are procuring, and to, you know, how do you help them be better educated, and provide more affordable and accessible medicine for the end patient? If we do that, given, as I stated earlier, the great patient volumes that pharmacies receive, you actually have this amazing conduit to improve public health at scale.

07:04 Tony Estrella 

Yeah, it’s quite an ecosystem of opportunities that you’re looking at there. And one thing that jumps to mind when you describe it that way is, I tried to think about the scale of pharmacies and the number of pharmacists in the region. And, you and I’ve spoken in the past one thing that stood out to me if I compare pharmacies in Southeast Asia, and the pharmacy structure is not a copy and paste duplication of what you might see in other countries in the West, for example. So can you describe to us – take Indonesia as an example – what exactly is the level of pharmacies that are out there? How do you subdivide that from hospital pharmacies to mom-and-pop pharmacies and family pharmacies? Can you tell us a bit more about that?

07:44 Farouk Meralli 

Sure. So Indonesia has by far and large, our biggest market, it also happens to be the biggest, you know, certainly population wise within the region. And the country like Indonesia, what’s, what’s surprising is about 92% of all the pharmacies are actually independent. So you have a situation where you have about 20,000 active pharmacies, and 92% of them are actually independent mom-and-pop shops. So when you go to the nice malls, and you go to the nice parts of the city, you may see, you know, a chain drugstore, but actually in, in reality, when it comes to serving the population, when it comes to a percentage of the total sales and revenue of the total pharma market, all of that really passes through, I would say the overwhelming majority passes through these small independent pharmacies. So that’s really the opportunity, and Indonesia is not dissimilar from let’s say, Vietnam, or Thailand, or any of these other emerging Asian markets that have high growth potential, but really have this sort of fragmented supply chain.

08:45 Tony Estrella 

So we’re talking about a lot of independent pharmacies who are not connected in any way until you came along. And I guess the added challenge in a place like Indonesia is that it’s largely a collection of islands. So even the geography itself can make it a bit of a problem for people to get to anything but a pharmacy, if I understand that correctly, is that right?

09:05 Farouk Meralli 

That’s correct. And actually, it underscores the importance of technology, especially when it comes to accessing those remote locations. For example, 49% of our users who take our online training and education for pharmacists to better counsel patients come from rural areas, right. And that is a very clear example of how technology can really target this particular user base. In addition to that, you know, the average age of our users is around 29 years of age. So it skews quite young, as you would expect with technology driven solutions. But that is representative of the pharmacy workforce as well, the active pharmacy workforce. And, about 70% of the users that we reach are actually female. So it’s quite interesting when you look at it either from a geography lens, a gender lens, and even a sort of age lens on who you are serving and how you can provide last mile access to the patient.

10:02 Tony Estrella 

One thing that’s astounded me when you and I have spoken in the past and when I look at the data is, how many pharmacists and how many individuals you then reach through pharmacies. Can you talk a bit more about the scale you’ve created through mClinica?

10:15 Farouk Meralli 

Yeah. So you know, I think this was a very fragmented hard to reach base, right. And how we define our users are, they are the people who work at the pharmacy who either influenced the patient or make a decision for purchase for the pharmacy to get the product to the patient. And so when we look at that, we look at how these pharmacy professionals are actually set up, how we can actually connect them digitally and how we can reach the underlying pharmacies that they operate. So today, we connect actually more than 190,000 pharmacy professionals, so these are pharmacists, pharmacy assistants, owners and managers, from about 45,000 pharmacy outlets across Southeast Asia. To put things in perspective, about one in every three pharmacy professionals in Southeast Asia, we are connected to digitally. So you know, you’re looking at a base that was very hard to access before whether you are a pharma company, a government or NGO that is now digitally connected. I think, again, that is the power of serving a segment that is so critical, but often overlooked, and driving it through technology.

11:23 Tony Estrella 

That’s really amazing that you brought that collection of people together and and then so what does that translate into in terms of reaching ‘n’ individuals who are managing their health? How many people do you reach? Or could potentially reach to those 40,000 plus pharmacies?

11:38 Farouk Meralli 

Yeah, so I think when you think about accessing the end patient, really, you know, there kind of three major areas, right one, you can go direct to the customer, many telehealth companies do that, you know, these are the telemedicine players and the like. Then there’s, you know, reach them through the physician, which is certainly more difficult, I would say, given the nuances of working with physicians and applying technology and then getting to the end patient. And the third vertical, which is where we focus on is getting to the end patients at the pharmacy. When you look at just sheer footfall and patient volume numbers, we think this is a very interesting way to get to the end patient. So when we look at the 45,000 pharmacies that we actually cover in network, they’re reaching an approximate 150 million patients a year, right. And then, actually, it sounds like a crazy high number. But when you think about how many times an individual visits their local pharmacy, you can actually see how this is very possible. So if you strengthen this channel digitally, you have a very interesting sort of way to get to the end consumer, albeit indirectly.

12:37 Tony Estrella 

And you’re clearly a technology driven company first, and I look at it as one of the most impactful digital health companies in terms of the reach you built. Can you tell us a little bit more about the solution? You mentioned education, you mentioned that you connect with pharmacists. Tell us a bit more about what is the actual journey for one of your customers? What’s their starting point, and what are their options for how they interact with your platform?

12:59 Farouk Meralli 

So we have a flagship app called SwipeRx, and SwipeRx is a all-in-one app for pharmacy professionals. It provides them education, information, training, drug information, everything that pharmacy professionals really need to better serve patients and manage their pharmacies. And we do this in concert with local pharmacy associations who are partners. We do this with global partners like the WHO or Johns Hopkins or other universities. And so, what we do is we first aggregate all the things that pharmacy professionals need, from a learning education training perspective in one app. And that’s how we quickly aggregated that population. Once they were aggregated, it allowed us to help them in their purchasing. So if you look at how pharmacies purchased today, and many of the markets that we operate in, they can actually buy the same product from multiple different sellers all at different prices, payment terms and delivery dates. Within SwipeRx, we provide a facility for pharmacy professionals to do their ordering. And essentially, what we do is we negotiate on their behalf for better and better pricing and make sure that the product is accessible, even providing them financing for their purchase. So really solving that problem upstream in the supply chain of how pharmacies actually buy. The third and last thing we do is help pharmacies and what they sell. So this means how do we actually provide an ability for pharmacies to provide discounts to their patients, engage them into health education, and actually bring pharma companies or governments to sponsor these types of programs. So if you think about how the US works with copay and coinsurance programs, how do you actually build that for out-of-pocket markets in Southeast Asia when there are issues of access and affordability and that’s really where we come in with our systems that adjudicate, you know, point-of-sale discounts, provide authorization, health education, disease management. So in summary, it really is about aggregating them to help them connect, and have knowledge and education and training and information resources to be better pharmacy professionals, then it’s about helping them to buy better. And then it’s about helping them to sell them. If you think about it, in aggregate, what we are doing is building the stack that let’s say large pharmacy chains have, like CVS and Walgreens that have structured education, structured buying, and structured selling, and saying how do you provide that same digital stack to the independent mom-and-pop pharmacy.

15:32 Tony Estrella 

And they must find that incredibly valuable. And you’re clearly affecting not just the growth of these pharmacies, but also the quality of the interventions that they’re providing for their individual end customers. So that’s really impactful. And you look at the ecosystem, right? So you clearly have not just the pharmacist themselves, but you have to interact with pharma, and any company that might be providing any sort of solution to the pharmacist. Where do you see pushback? Where do you see the challenges that you’ve had to push your way through to try to achieve scale?

16:04 Farouk Meralli 

So I think, you know, when you think about the traditional pharmaceutical model, right, it relies largely on sales reps, or field reps to go visit pharmacies. And I think when you start to provide digital intervention to the key account, being the pharmacy, in this case, you start to almost compete with the sales rep, which is that the field trainer is usually there to go, you know, do detailing, provide information, education, knowledge, even sometimes take orders. And now you’re saying, well, you know, I have a digital tool to be able to do all those things, arguably, more efficiently. And I think, you know, that’s always a path to change. I think pharma companies inherently know that the days of the field rep are a little bit numbered, and there needs to be greater efficiency there. That’s been a long theme. So what we did see is that obviously, with COVID, field reps couldn’t go out. So actually, you had almost a forced change, where pharma companies were more and more interested in finding digital methods to engage and then realized well, that they can get a lot of the same efficacy, if not more, if they actually use digital means to to reach that end pharmacy. So that’s kind of been a little bit of a journey. But I would say in Southeast Asia, generally, there is a lot more openness to new technology. This is a region of the world that has always leapt forward and hasn’t been as encumbered with legacy technology as some of the West and so that I think that makes it much more open as a region for these types of technology and innovations. And it’s almost becoming status quo to try these new things.

17:37 Tony Estrella 

Yeah, I agree, and with super apps like Grab and GoJek, which are used for not just ride-sharing, but food, ecommerce, and banking, these super apps are vying for dominance in a population of Southeast Asia, which numbers over 650 million people, many of them who may be just learning how to use these mobile tools and supportive health and finance. But there are large populations, which can be quickly empowered by digital health. Shifting back to COVID, can you talk a bit more about how this pandemic has changed your business in the last 12 months?

18:07 Farouk Meralli 

So I think I think really, there’s two broad areas. The first one is that, as I mentioned, it creates acceleration for decision makers to go digital, largely out of necessity. So decisions that would have taken a long time are now made much quicker. Every pharma company has a digital strategy. Governments, NGOs, who we also work with very, very closely have digital strategies now. And I think, you know, this was quite interesting in terms of decision making. And the other thing that we see is that actually, pharmacies are seen as actually very critical. And if you think about it, during COVID, access to hospitals, and physicians, whether they be private clinics has actually decreased over time. And the reason why is you know, a lot of people actually are scared to actually visit some hospitals or not in-taking patients who are non critical and essential. So therefore, we actually see greater volume coming towards the pharmacy during the period. And this kind of becomes the accessible point of care without all the fear and access problems that sometimes hospitals and clinics have during this constrained period. So I think the importance and role of the pharmacy is very much underscored during this time. And just to add one more thing, I think what’s also been interesting is our ability to respond directly to COVID-19. So when COVID-19 hit, you know, we were actually contacted by the Ministry of Health of Indonesia, Philippines, Cambodia, other countries as well as bilaterals, like USAID and universities like Johns Hopkins to mount a consolidated multi-country effort to teach and train pharmacy professionals on COVID-19. These are frontline health workers like anyone else. They have exposure. They also are appoint of counsel. They’re also appointed screening and referral. So very quickly, in the early days of March, it was about directly being involved in the response, and really educating, training and doing. Now that we go forward, the role is actually looking at vaccine distribution through pharmacies or administration of it through pharmacies, actually doing more point of care diagnostics, that potentially can be done by the pharmacy to increase testing capacity. So again, everything really around the role of the pharmacy, and being able to actually be directly impactful in COVID-19. You know, after all, on a personal note, my background is in public health, this is quite exciting aspect of what we’re able to do, which is not on just a daily basis, make an impact in healthcare, but in these special situations, actually be able to with the team, solve these problems at record pace, and do something that, you know, couldn’t have been possible three, four years ago, given that now this platform that we built exists,

20:51 Tony Estrella 

Yeah, you, from a public health perspective, you clearly you are creating greater adoption and faster change now than at any other point in time. And you along those lines, we think about some of the questions that creep up when it comes to the adoption of digital health and whether it stays I think of telemedicine, right. So my parents started using telemedicine for the first time during this pandemic. And you know, I think that they’re converts, they will continue to use it, especially if it’s subsidized. They live in the US. From the work that you’re doing, and from what you’re seeing, do you think that the change and transition you’ve created, especially the elevated role of pharmacists will stick? Do you think that this trend will continue? Or do you see that there’ll be a pushback and once we get back to post-pandemic life that starts to mirror what we had before some things will regress. What’s your prediction?

21:42 Farouk Meralli 

I think what we see is the role of the pharmacy will continue to be there and be even more meaningful for populations that have access issues when it comes to actually doctors. And I think even though telemedicine is rising and provides very good value and solves very clear problems, the user base that it is going after generally in Southeast Asia is a limited one at that, right. So you’re either dealing with those insurance covered beneficiaries whose plans cover this which are limited, or you’re dealing with the out-of-pocket market, where these are the premium segment, they have to have a smartphone, they have to have data they have to be willing to pay, they have to have kind of these types of barriers. When you think about where these platforms are going, I think over time prices will go down and telemedicine to the point where it’s almost a platform, right, and ultimately, it’s the doctor that will still continue to be important in delivering that care. So they will have many, many choices on which platform to use. And they’re essentially the star player, right? Which team they play on is somewhat irrelevant. And so I think, you know, that’s where if I forecast, it’s kind of almost the commoditization of it and saying that, ultimately, it’s about what platform solves it first, right and best. So I think that’s a good thing in the sense that it will extend telemedicine to more and more users at a cost that is low. I think ultimately, though, when you think about telemedicine, if it’s in concert with the prescription, somewhere, somehow you need to get the drug to the patient, right. And this is also where we play a role as an enabler to provide that back end to that that type of space as well. So I think, you know, we do see this kind of being very important, but if pharmacies do not get digital fast, they will get left behind, like any industry. And we hope to help them move forward and modernize. And so that’s really where we see our role and the role of pharmacists, which we continue to see important, especially in certain key populations, which form the majority of populations and many of the markets that we work in

23:47 Tony Estrella 

Good thoughts for what we can expect from the future or who I will try to track for the future. And what about from mClinica? There’s clearly an opportunity for continued growth. What do you see for the future for yourself in terms of fundraising and growing the team, growing the number of markets you’re in and maybe start with what markets are you currently operating in? And where else would you like to expand to?

24:07 Farouk Meralli 

Yeah, so I think, you know, we had a very interesting strategy as a company, we actually went wide first. And now we’re going very, very deep and have been for the recent time. And what I mean by that is, you know, we operate across Southeast Asia, Indonesia, Philippines, Malaysia, Thailand, Vietnam, Cambodia, we’re HQ’d in Singapore. So really, we’ve had all the big Southeast Asian markets. And I think for healthcare, that’s a little bit rare, I would say, for health tech, I usually see them in one if not two countries. To be a regional player, I think it’s infinitely more difficult just because of the local laws and regulations that you have to make your system work. I think the team was very good and understanding common patterns, solving for local laws and regulations, and ensuring that we actually had consistent user adoption in all markets that we entered. So now for us, the future involves going very deep into the pharmacy providing the aspects and value that we provide today, but also going deeper and deeper into the actual pharmacy and providing them more and more relevant, valuable technology that they can use to better serve patients and manage their pharmacies. So it’s a pretty high level answer, but I think you know, for us, our Northstar has always been the same since we began, which is, you know, the pharmacy to us is the center of community care. And our job is actually to empower them with all the technology and tools to be able to better serve that end patient. So with that mission in mind, we are still pursuing that, that mission.

25:38 Tony Estrella 

Great. Well, we will keep an eye on the growth of your business, and I look forward to connecting with you again, and having another conversation down the road and seeing how you’ve continued to get deeper and provide more value for pharmacists. We’re coming up on time here. So I guess last question for our audiences, how can they get ahold of you? What is there any resource that you recommend that they use to track you through LinkedIn or social media?

26:03 Farouk Meralli 

Yes, sure, you can add me on LinkedIn, Farouk Meralli, I’m sure Tony can provide you the link, and I’m happy to connect, happy to chat. It’s very interesting to me to new folks who are interested in this space and see how we can collaborate. I think it does take a village to solve this problem. But great to be with you, Tony, I really appreciate your chats. I’m a big fan. I read your first book when it came out, looking forward to the new ones and, and always a fan of your work. So thank you for having me.

26:32 Tony Estrella 

Thanks for your kind words Farouk. And that’s a wrap on this episode. Farouk’s LinkedIn is included in the show notes along with other relevant ones for Farouk, mclinica, and me. Before I go, here’s how you, our audience can support us.

26:46 Tony Estrella 

Please share this podcast with others, and if you subscribe, you’ll get updates on new episodes and other content. Through my website, www.tonyestrella.com, you can learn more about my writing and links to reach me on LinkedIn, Twitter, and WeChat. Or you can email me at APAC [at] digitalhealthtoday.com if you have any questions, suggestions, or ideas for future episodes. And finally, please visit our website at digitalhealthtoday.com or on our second home at healthpodcastnetwork.com to hear other episodes from our podcasting team. This show was researched and written by Taliossa, and produced along with Mission Based Media. The sound and music was by Ivan Juric, and until next time, I’m Tony Estrella, and thank you for listening.

 
 
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